Mumbai, Feb 20 (PTI) The completion of the India-EU free trade negotiations and the interim trade pact between India and the US are likely to play a significant role in the coming years by improving market access and enhancing export competitiveness, the RBI's bulletin issued on Friday said.

An article on the 'State of the Economy' published in the February bulletin also said that the near-term economic outlook for the economy remains favourable and is well-positioned to sustain its high growth momentum, driven by consumption, investment, and productivity-enhancing reforms.

The completion of the India-EU free trade negotiations by the end of January and the subsequent interim trade agreement between India and the US are likely to play a significant role in the coming years by improving market access, enhancing export competitiveness, and integrating Indian firms more deeply into global value chains, it said.

"In the immediate term, it has led to a change in investor sentiments. Foreign portfolio investment into the equity and debt segment staged a comeback in February," it said.

The article further said the Union Budget 2026-27 reaffirmed the government's commitment to fiscal consolidation without diluting the focus on long-term growth with stepped-up allocation towards capital expenditure.

The headline inflation continues to remain benign as per the first print under the revised CPI series, it added.

The central bank said the views expressed in the bulletin article are those of the authors and do not represent the views of the Reserve Bank of India. PTI NKD NKD BAL BAL

Free trade agreements improving market access and export competitiveness, prompting investor confidence and supporting growth policy. Free trade agreements with the EU and an interim pact with the US are expected to improve market access, enhance export competitiveness, and deepen Indian firms' integration into global value chains; this expectation has altered investor sentiment, prompting a return of foreign portfolio investment, while the Union Budget stresses fiscal consolidation alongside stepped up capital expenditure, and headline inflation remains benign under the revised CPI series.